The proposed project is the second revision of the competitive renewal of R01 MH39531-13. This project has two major aims and one exploratory aim. The first major aim is to elucidate the role of cholinergic sensitivity in modulation of affective morbidity and REM sleep dysregulation within families. A cholinergic probe will test the hypothesis that cholinergic effects mediate the familial occurrence of affective morbidity and that REM sleep dysregulation is a risk factor. The second major aim is to estimate the influence of EEG sleep measures, family of origin and cognitive and psychosocial measures on the risk of new onset depression, adjusting for age and sex, among at-risk relatives with evidence of sleep dysregulation, compared to at-risk relatives with normal sleep. The finding that different domains predict the first episode of depression in at-risk relatives, based on premorbid sleep dysregulation will also be tested in a more complex model. Sleep dysregulation in unaffected at-risk relatives doubles risk for onset of depression. When at-risk relatives with normal sleep have their first episode, however, they are susceptible based on premorbid negative cognitions. Our exploratory aim is to evaluate the power spectral profile of EEG sleep to determine whether a profile can be identified that is specific to risk for depression among families. Although genetic studies are not part of the proposed project, results of the project can identify pedigrees that will be informative in future work. The cohort of 348 individuals from 69 families is a unique resource for mechanistic studies directed at the role of cholinergic mediation of both mood disorders and sleep dysregulation. Families are identified by 1) depressed probands with short REM latency, 2) depressed probands with normal sleep and 3) probands with no psychiatric history and where sleep was free to vary. After careful study of sleep physiology and psychiatric and medical history, families have been followed clinically over the 13 year course of this study. PSG abnormalities aggregate in families and increase risk for depression. Prospective study of the course of unaffected individuals has identified premorbid factors that predict the first mood disorder. Among affected relatives, divergence in morbidity is based on familial sleep profiles. Our well-studied cohort can address mediation of depressive morbidity by neurophysiological mechanisms separate from psychological mechanisms. These procedures will identify informative families for genetic studies.